In a strongly worded memo sent to staff of the Consumer Financial Protection Bureau Tuesday, acting Director Mick Mulvaney slammed the "mission" of the agency under his predecessor while laying out a new governing philosophy for the bureau.

Mulvaney, who has steadily remade the agency since assuming his position in late November, indicated the bureau will value the concerns of companies it regulates to the same extent as consumers, prioritize rules of the road over enforcement actions and avoid what he described as his predecessor's "pushing the envelope."

"When it comes to enforcement, we will be focusing on quantifiable and unavoidable harm to the consumer," Mulvaney wrote. "If we find that it exists, you can count on us to vigorously pursue the appropriate remedies. If it doesn’t, we won’t go looking for excuses to bring lawsuits."

Mick Mulvaney, OMB director and acting director of the CFPB
"When it comes to enforcement, we will be focusing on quantifiable and unavoidable harm to the consumer," Mulvaney wrote. "If we find that it exists, you can count on us to vigorously pursue the appropriate remedies. If it doesn’t, we won’t go looking for excuses to bring lawsuits." Bloomberg News

The memo was leaked and released by the investigative journalism outlet ProPublica. The Wall Street Journal published an adapted version as an op-ed written by Mulvaney.

In the memo, Mulvaney quoted comments from a December article in Politico magazine that he attributed to former CFPB Director Richard Cordray. However, the article was instead quoting a former CFPB official, who said of the bureau under its former director, “We wanted to send a message: There’s a new cop on the beat. Pushing the envelope is a loaded phrase, but that’s absolutely what we did.”

Mulvaney blasted that approach.

"Simply put, the days of aggressively 'pushing the envelope' of the law in the name of the 'mission' are over," Mulvaney said.

He said prior leadership believed the CFPB "were the 'good guys' and the 'new sheriff in town,' out to fight the 'bad guys.' "

"That is what is going to be different," Mulvaney wrote. "In fact, that entire governing philosophy of pushing the envelope frightens me a little. I would hope it would bother you as well."

Observers said Mulvaney may have meant for the memo to be viewed by the public at large.

"You don't send something to all staff without knowing it would be leaked," said Ed Mills, a public policy analyst at Raymond James.

Mills said Mulvaney was sending a message about a pullback in enforcement actions.

"He is taking what were among the most controversial aspects of Cordray's leadership and saying that's not how we're going to run things," Mills said.

Yet the memo will likely do nothing to settle the overarching policy debate in Washington about the CFPB's long-term mission. Supporters of how the bureau was run under Cordray have seemed to home in on everything Mulvaney says or does. Indeed, the ProPublica article containing the memo was based on reporting earlier in the day about the agency dropping a prior investigation into an installment lender that had donated to Mulvaney's past political campaigns.

“It’s fitting that on the same day that Mr. Mulvaney dropped an investigation into one of his campaign donors, he admits what his actions have already demonstrated: that under his leadership the CFPB will no longer be a tough watchdog for consumers, but just another Washington agency that looks out for the wealthy and powerful instead of working families,” Sen. Elizabeth Warren, D-Mass., the bureau's original architect, said in an emailed statement.

Mulvaney said the CFPB will provide fair warning to companies it regulates. He said it will not engage in "regulation by enforcement," a term often used during Codray's tenure to describe enforcement actions identifying unfair, deceptive or abusive acts or practices.

"On regulation, it seems that the people we regulate should have the right to know what the rules are before being charged with breaking them," he wrote. "This means more formal rulemaking on which financial institutions can rely, and less regulation by enforcement."

Mulvaney said the CFPB's new mission is to enforce consumer protection laws "with humility and prudence," but, he added, "We go no further."

Mulvaney alleged that the CFPB under Cordray had hurt employees at the companies it supervises, and equated the companies the CFPB regulates with their customers. Mulvaney indicated that he views companies as "people" and as "citizens."

"It is not appropriate for any government entity to 'push the envelope' when it comes into conflict with our citizens," he wrote. "The damage that we can do to people could linger for years and cost them their jobs, their savings, and their homes. If the CFPB loses a court case because we 'pushed too hard,' we simply move on to the next matter."

"But where do those that we have charged go to get their time, their money, or their good names back?" he continued. "If a company closes its doors under the weight of a multi-year civil investigative demand, you and I will still have jobs at CFPB. But what about the workers who are laid off as a result? Where do they go the next morning?"

He said he did intend to pursue actions to protect consumers, but indicated those types of steps would be limited.

"Let me be clear: there will absolutely be times when circumstances dictate that we take dramatic action to protect consumers," Mulvaney wrote. "And at those appropriate times, I expect us to be vigorous in our enforcement of the law.

"But bringing the full weight of the federal government down on the necks of the people we serve should be something that we do only reluctantly, and only when all other attempts at resolution have failed. It should be the most final of last resorts."

The memo cast doubt on whether the CFPB wants to retain talent in its enforcement division and its research, markets and regulations division — both of which were heavily favored by Cordray.

Mulvaney said the CFPB plans to prioritize its actions based on complaints to its consumer database, one-third of which are related to debt collection. The bureau also will spend more time on cost benefit analyses of its rules and regulations, and will use quantitative analysis as a guidepost.

"There is a lot more math in our future," he wrote.

In the nine weeks since he was named to the acting role by President Trump, Mulvaney has not filed any enforcement actions but rather has put a freeze on them while he undertakes an agencywide review.

Mulvaney also quoted a passage from the play "A Man for All Seasons," by Robert Bolt, a fictional account of the life of Sir Thomas More: "This country is planted thick with laws, from coast to coast — Man’s laws, not God’s — and if you cut them down do you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil the benefit of the law, for my own safety sake."

Mulvaney wrote: "Put another way: if you push the envelope now in pursuit of the supposed 'mission,' what’s to stop someone else — with a different mission, perhaps — from pushing that envelope against you tomorrow?

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